How to Buy Individual Health Insurance Coverage at Group Rates

Group health insurance, as part of a group plan at a full-time job, is generally offered at lower rates on premiums compared to individual health insurance coverage. But if you leave your job – or start another one that doesn’t offer health insurance, a group health plan may not be an option. And you may be surprised at just how expensive the same coverage is when you buy individual health insurance.

While individual health insurance plans are purchased directly from carriers, leaving out the employer middle man, they do not offer the fuller range of benefits and lower rates associated with the typical workplace group plan. However, individual plans may cover you, your spouse, and your children. The two other main methods to get an individual health insurance plan when you’re not fully employed with a group health plan are to obtain either “short-term” and/or “catastrophic” coverage.

Individual plans are “medically underwritten”, which means the insurer may reject your application, if you have existing health problems. Some states don’t allow this practice and require that insurance carriers offer you a policy, no matter what your medical condition. A list of “Guaranteed Issue Laws” has been published by the Kaiser Family Foundation, so do your homework before you let a carrier reject your desired policy application, or make exclusions to it.

Individual plan buyers pay premiums determined by their “expected” health care costs, so prices will be higher as they grow older and/or less healthy. But don’t let any confusion tempt you to go without health insurance. Healthy or not, you could have a serious accident, and, as many others are, be forced into “medical bankruptcy.”

It’s important for you to keep in mind that you’ll lose your rights to coverage of pre-existing conditions if you go without insurance for 63 days or more, a time period set by the Health Insurance Portability and Accountability Act (HIPAA).

You may feel locked out of the health insurance market if, for example, you’ve been uninsured for too long, or have a “pre-existing condition”. It may seem impossible, there are practical ways you may be able to get coverage.

Double check the facts in your state because, in some states, self-employed sole proprietors are eligible to buy independent health insurance at the premium rate of a “group of one”. Even if you are a home-based businessperson you may do so, if you can show that you’ve been in business for 30 days or more.

Do some research to find out if you qualify for a group rate, even if you live in a state that does not offer these “group of one” insurance policies. For example, if you own a business, even a home-based business, and have at least one partner or employee, even your spouse who may be doing secretarial work for you; this situation qualifies you as a two-person business, eligible for a group-rate policy.

If you’re moving on from full-time employment with an existing group health plan, ask the employer’s insurer to convert your policy to an individual health insurance plan. Your rate will be higher than your employer’s group plan, but that way you can secure a health coverage plan. This is extremely important if you have existing medical conditions. Also check to see if your spouse has a group plan at work, and find out if they can add you onto it.

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